Supply Chain Exam 1

Supply Chain

3 or more companies linked by flows of product, service, cash, and information (Mentzer).

Supply Chain Management (SCM)

The planning and management of sourcing, procurement, conversion, and logistics activities, including coordination with partners such as suppliers, 3PLs, and customers (CSCMP).

Logistics

The execution piece of SCM responsible for moving and storing goods from origin to customer (CSCMP).

SCOR Model - Plan

The SCOR process of aligning sourcing, production, and delivery with strategy using forecasts, capacity planning, and network design.

SCOR Model - Source

The SCOR process focused on picking and negotiating with suppliers.

SCOR Model - Make

The SCOR process of actually creating the product or service.

SCOR Model - Deliver

The SCOR process responsible for storing, sorting, and transporting goods, comprising transportation, distribution, and order management.

SCOR Model - Return

The SCOR process covering reverse flow activities such as recycling, remanufacturing, and customer returns.

SCOR Model - Enable

The backbone functions including data, compliance, technology, and finance that keep the other five SCOR processes running.

Possession Utility

Perceived value created by Marketing that builds customer desire for a product.

Form Utility

Perceived value created by Production through repackaging or refurbishing.

Time Utility

Perceived value created by Logistics by ensuring products are available when needed.

Place Utility

Perceived value created by Logistics by ensuring products are available where needed.

Quantity Utility

Perceived value created by Logistics by providing the right amount of product through breaking bulk and assorting.

Systems Thinking

A methodology defined by Senge that sees consequences of actions, connections across a situation, and understands how things unfold over time.

Theory of Constraints (TOC)

A foundational theory stating that every real system has at least one constraint that must be managed deliberately to make more money now and in the future.

Throughput (T)

In TOC, the rate at which the system generates money through sales.

Inventory (I)

In TOC, money invested in things intended to sell, categorized as a liability rather than an asset.

Operating Expense (OE)

In TOC, the money spent turning inventory into throughput.

Drum (DBR)

In Drum-Buffer-Rope, the constraint that sets the pace for the entire system.

Buffer (DBR)

In Drum-Buffer-Rope, a work-in-process (WIP) stockpile positioned in front of the constraint to protect it from upstream hiccups.

Rope (DBR)

In Drum-Buffer-Rope, the signal that paces how fast upstream operations release material.

Activity-Based Costing

A costing method that traces the true cost-to-serve along the path: resources to activities to cost objects.

Horizontal Gaps

Gaps in the Order Management Cycle where an order falls between departmental hand-offs because no single person owns the entire cycle.

Vertical Gaps

Gaps in the Order Management Cycle where executives see an oversimplified picture of order flow while frontline workers with detailed knowledge lack upward voice.

Sales and Operations Planning (S&OP)

An internal integration process where executives continually align demand and supply plans across sales, operations, and finance.

Collaborative Planning, Forecasting, and Replenishment (CPFR)

An external integration process where trading partners share forecasts through a common process or interface.